Pathward Financial Q3 2026 Earnings Call Transcript

Pathward Financial (NASDAQ: CASH ) released third-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

37 for the third quarter of fiscal 2026. 29%. The company experienced credit-related challenges with specific reserves on two loans, including one associated with fraud. Despite these, the CEO emphasized they are not indicative of broader systemic issues.

Strategic initiatives highlighted include expanding the product suite, enhancing client experience, and leveraging technology. The company received recognitions for its workplace culture. Noninterest income increased by 4% year-over-year, with improvements in tax product revenue and disciplined expense management. 50 to $10.

The company continues to grow its Commercial Finance business, with an 8% increase in loans and leases. New originations totaled $760 million, driven by growth in the Credit Solutions business. Management remains positive about future growth opportunities in banking-as-a-service and renewable energy sectors, despite current credit challenges. Full Transcript OPERATOR Ladies and gentlemen, thank you for standing by and welcome to Pathward Financial's third quarter 2026 investor conference call.

During the presentation, all participants will be in a listen-only mode. Following the prepared remarks, we will conduct a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again.

As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Darby Schoenfeld, Senior Vice President, Chief of Staff and Investor Relations. Please go ahead. Darby Schoenfeld, SVP, Chief of Staff and Investor Relations Thank you, operator, and welcome.

With me today are Pathward Financial's CEO, Brett Pharr, and CFO, Greg Sigrist, who will discuss our operating and financial results for the third quarter of fiscal 2026, after which we will take your questions. com. As a reminder, our comments may include forward-looking statements. Those statements are subject to risks and uncertainties that could cause actual and anticipated results to differ.

The Company undertakes no obligation to update any forward-looking statement. Please refer to the cautionary language in the earnings release, investor presentation, and in the Company's filings with the Securities and Exchange Commission, including our most recent filings, for additional information covering factors that could cause actual and anticipated results to differ materially from the forward-looking statements. Additionally, today we will be discussing certain non-GAAP financial measures on this call.

References to non-GAAP measures are only provided to assist you in understanding the Company's results and performance trends, particularly in competitive analysis. In order to make our adjusted net interest margin as comparable as possible, we have excluded the impact of the gross accounting methodology on our consumer finance loans and included contractual rate-related processing expenses associated with deposits on the Company's balance sheet. Reconciliations for such non-GAAP measures are included in the earnings release and the appendix of the investor presentation.

Finally, all time periods referenced are fiscal quarters and fiscal years, and all comparisons are to the prior-year period unless noted otherwise. Now let me turn the call over to Brett Pharr, our CEO. Brett Pharr, Chief Executive Officer Thanks, Darby, and welcome everyone to our third quarter 2026 earnings conference call this evening. Before I go through the quarter's highlights, I want to address the outlier of the quarter: credit.

We had an increase in provision during the quarter, largely driven by specific reserves on two loans and a CECL reserve build: one loan we mentioned during the June quarter earnings call last year, which at that time was shifting to non-performing with a path to workout, and another loan we believe is associated with a sophisticated fraud. You may have also noticed that our non-performing loan ratio increased. This was primarily related to certain renewable energy construction projects tied to a common developer. We continue to work with the other parties involved in these projects to bring them to completion.

However, while this work is ongoing, we have moved the loans to nonaccrual status. We are currently not aware of any other loans in our portfolio that have a similar unique fact pattern. While this is certainly a disappointing outcome, credit events can and do occur in the world of lending. It's unfortunate that we had these items happen within an otherwise solid performing quarter and year thus far.

We remain committed to providing transparency in connection with these credit items and continue our monitoring and oversight of the portfolio. At this time, we believe these events are not indicative of a broader systemic issue within the portfolio. With that context, we're pleased with the rest of the results achieved in the quarter. Across the organization, our team continues to deliver meaningful progress on our strategy, and over the past nine months I am proud of what we have accomplished.